TUD board reverses direction on water rate increase

Tuolumne Utilities DIstrict water customers will not see a rate increase this year.

The TUD Board of Directors voted 4-1 on Tuesday against a 2.78 percent water rate increase. The move signals a policy reversal for the board, which last year approved a five-year rate plan that would have incrementally increased water rates every year through the 2014.

There are four new members on the board this year. The only vote in favor of the increase Tuesday was from Delbert Rotelli, the lone returning board member from last year.

Director Kent Johnson said one of the goals of the TUD board is to “put an end to the rate increases for a period of time while we continue to look at other ways, less costly ways, to run this organization.”

Johnson and new fellow directors John Maciel, Jim Grinnell and Michael Sarno all voted to suspend the rate increase.

Johnson added that the move is meant to “stop balancing the growth of TUD on the backs of the people, our customers.”

Because TUD water customers will not see the planned 2.78 percent increase, TUD General Manager Pete Kampa said the district will have approximately $319,000 less in revenue than planned for the 2013-14 fiscal year and future budgets.

Because of state regulations, the district can’t add the 2.78 percent to proposed increases for 2014 and 2015 without adhering to a formal protest process.

Because of that, Kampa said TUD staff recommended the board delay a decision on the increase until a budget proposal is put together.

Sarno, the TUD board president, told Kampa that the recommendation was “duly noted” and “in this particular case ignored.”

The five-year rate plan approved last year included an initial increase to both the base rate and usage rate for water customers. That increase remains in effect.

Average residential customers, who have a three-quarters inch meter and use about 900 cubic feet of water, saw their total monthly bills go up from about $40.56 to $43.32 a month, with another $1.20 monthly increase proposed for 2013 and $1.24 in 2014, though left at the discretion of the district board.

Non-residential and raw-water customers also saw similar increases, though they are charged under different structures, with some high volume users reporting steeper rate increases.

The plan is scaled down from an initial proposal that received a lot of public criticism, which called for an increase for the average residential customer of nearly $10 in the first year and smaller annual bumps after that.

After a strong pushback from customers, district leaders put together the new plan with a number of labor concessions and cost-savings measures, including elimination of six unfilled positions, cutting back on planned transfers to the sewer and other reserve funds, reducing retirement health payments, and cutting back on studies and other areas.

Proponents of last year’s increase said at the time that the new rates are necessary to maintain the district’s complicated and aging infrastructure. Four of the directors who backed the new rates at the time and defended the move in their campaigns in the fall were not re-elected in November.

Rotelli, the only one on the board re-elected last year and a supporter of the rate increase then and now, echoed their concerns on Tuesday.